Displaying items by tag: portfolio optimization

The Pulse survey shows that advisors are shifting toward more flexible mandates, reducing allocations to core fixed income while increasing exposure to multisector fixed income and alternatives.  U.S. large-cap stocks—especially growth and blend styles—continued to dominate allocations, fueled in part by AI tailwinds and earnings strength. 

Active strategies also gained share, including active ETFs, which surged in usage over the past year. On the fixed-income side, core bond exposure was trimmed as advisors looked to diversify diversifiers like high yield, multi-sector, and credit-sensitive sectors. 

The average model portfolio holds around 16 distinct positions, and allocations to alternative strategies increased, with defined-outcome and multi-strategy mandates among the fastest-growing categories. 

Finsum: Advisors should look to factor portfolio tools to leverage in construction to better serve their clients’ needs. 

In the evolving “post-60/40” investing landscape, alternatives often come with higher fees and reduced liquidity, but investors tolerate these trade-offs for the potential of higher returns and skilled management. Wealth managers stress that allocations should reflect an investor’s liquidity needs, risk tolerance, and experience, with recommendations ranging from a cautious 10% to as high as 50% for those with no short-term cash flow requirements. 

While some, like Marina Wealth’s Noah Damsky, seek niche managers with unique strategies, others—such as International Assets Advisory’s Ed Cofrancesco—favor straightforward private real estate projects for their simplicity and transparency. 

Ballast Rock Private Wealth’s Andrew Mescon highlights private credit and private equity secondaries as compelling opportunities, citing diversification, downside protection, and discounts to net asset value as advantages. Managers also note the growing role of evergreen fund structures, which can ease liquidity constraints and broaden access to these asset classes. 

Finsum: Ultimately, successful alternative investing hinges on aligning product complexity, fees, and liquidity with each investor’s unique financial situation.

Artificial Intelligence is being adopted across the financial industry. In a recent poll by the World Economic Forum, executives at 151 leading financial institutions were asked questions about the prospects of AI in their business. 77% expect AI to be a critical part of their business in the next two years and 64% expect to be mass adopters. Magnifi can bring this cutting-edge technology to your financial institution. Adopters of Magnifi’s products will utilize machine learning techniques that can optimize portfolios for their clients across risk, return, themes, fees, and other factors. AI’s wide adoption is being utilized to lower high labor costs, or even better, to augment current labor for more productivity. Finally, Magnifi delivers all of this with a simple set of tools that are easy for advisors to interact with to deliver their clients the best product possible.